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How CAT rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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New in FY2025

Highlights for the full-year 2025 include: • Sales and revenues for 2025 were $67.589 billion, an increase of $2.780 billion, or 4 percent, compared with $64.809 billion for 2024.
Sales were higher in Power & Energy , about flat in Resource Industries and slightly lower in Construction Industries . • Operating profit as a percent of sales and revenues was 16.5 percent in 2025, compared with 20.2 percent in 2024.
Adjusted operating profit margin was 17.2 percent in 2025, compared with 20.7 percent in 2024. • Profit per share for 2025 was $18.81, and excluding the items in the table below, adjusted profit per share was $19.06.
Profit per share for 2024 was $22.05, and excluding the items in the table below, adjusted profit per share was $21.90. • Enterprise operating cash flow was $11.7 billion in 2025.
Caterpillar ended 2025 with $10.0 billion of enterprise cash.
In order for our results to be more meaningful to our readers, we have separately quantified the impact of significant items.
Full Year 2025 Full Year 2024 (Dollars in millions except per share data) Profit Before Taxes Profit Per Share Profit Before Taxes Profit Per Share Profit $ 11,541 $ 18.81 $ 13,373 $ 22.05 Other restructuring (income) costs 445 0.73 195 0.32 Pension/OPEB mark-to-market (gains) losses (294) (0.48) (154) (0.23) Restructuring (income) costs - divestitures of certain non-U.S. entities — — 164 0.22 Tax law change related to currency translation — — — (0.46) Adjusted profit $ 11,692 $ 19.06 $ 13,578 $ 21.90 A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 48 - 49.
OVERVIEW Total sales and revenues for 2025 were $67.589 billion, an increase of $2.780 billion, or 4 percent, compared with $64.809 billion for 2024.
The increase reflected higher sales volume , partially offset by unfavorable price realization .
Higher sales volume was primarily driven by higher sales of equipment to end users.
Profit per share was $18.81 in 2025, compared with profit per share of $22.05 in 2024.
Profit was $8.884 billion in 2025, compared with $10.792 billion in 2024.
The decrease was mainly due to unfavorable manufacturing costs and unfavorable price realization, partially offset by the profit impact of higher sales volume.
Unfavorable manufacturing costs largely reflected the impact of higher tariffs.
Trends and Economic Conditions Outlook for Key End Markets In Construction Industries, we expect another year of sales of equipment to end users growth in 2026 compared to 2025, supported by elevated order rates and a robust backlog.
The outlook for North America remains positive, as sales of equipment to end users should grow moderately compared to 2025 with construction spending remaining healthy due to Infrastructure Investment and Jobs Act (IIJA) funding and other critical infrastructure programs.
We also anticipate accelerated investment in data centers, which will further bolster overall construction spending.
In 2026, dealer rental fleet loading and dealer's rental revenue are both projected to increase, compared to 2025.
In EAME , economic conditions in Europe are expected to strengthen, and construction activity in Africa and the Middle East is projected to remain strong.
In Asia Pacific, outside of China, moderate economic conditions are expected in 2026.
We anticipate positive momentum in China from low levels, with growth in the above 10-ton excavator industry in 2026.
Growth in Latin America is expected to continue in 2026 at a similar rate to 2025.
In Resource Industries, sales of equipment to end users is expected to increase in 2026 as compared to 2025, primarily driven by rising demand for copper and gold, and positive growth trends in heavy construction and quarry and aggregates.
In mining, most key commodities remain above investment thresholds, and customer product utilization is high while the age of the fleet remains elevated.
With modest increases in commodity prices projected in 2026, we expect rebuild activity to increase slightly compared to 2025.
In Power & Energy, we anticipate growth in Power Generation for both reciprocating engines and turbines and turbine-related services in 2026, driven by increasing energy demand to support data center build-out related to cloud computing and generative Artificial Intelligence (AI).
Additionally, we are starting to see orders for prime power trend higher as data center customers look for alternative power solutions to keep pace with their growth.
After reaching record levels in 2025, Oil & Gas is expected to see moderate growth in 2026.
Reciprocating engine sales are expected to increase, driven by strong demand in gas compression applications.
For turbines and turbine-related services used in Oil & Gas applications, we expect another year of strong sales in 2026 comparable to our record 2025 performance as backlog remains healthy, with continued solid order and inquiry activity.
Demand for products in Industrial applications is expected to grow moderately in 2026 as we see continued recovery from previous lows.
In Transportation, we anticipate growth in rail services and locomotive deliveries in 2026 compared to 2025.
Full-Year 2026 Company Trends and Expectations Our expectations assume the Rail division within Power & Energy, as was the case through year-end 2025.
In March 2026, we will file a Form 8-K recasting historical periods to reflect the movement of the Rail division to Resource Industries.
This will establish an appropriate baseline for evaluating future segment-level performance and expectations.
If necessary, we will also update any segment specific forward-looking assumptions impacted by this change.
There will be no impact on the enterprise-wide assumptions due to the Rail division recast.
For the full-year 2026, we anticipate sales and revenues to grow around the top end of our 5 to 7 percent compound annual growth rate (CAGR) target, as compared to 2025.
The strong backlog coupled with healthy end markets supports our expectations for sales volume growth in all three primary segments, as well as favorable price realization of about 2 percent of sales and revenues.
We expect machine dealer inventory to increase in 2026 and offset the $500 million decrease in 2025.

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Gone since FY2024

Highlights for the full-year 2024 include: • Sales and revenues for 2024 were $64.809 billion, a decrease of $2.251 billion, or 3 percent, compared with $67.060 billion for 2023.
In the three primary segments, sales were lower in Construction Industries and Resource Industries and higher in Energy & Transportation . • Operating profit as a percent of sales and revenues was 20.2 percent in 2024, compared with 19.3 percent in 2023.
Adjusted operating profit margin was 20.7 percent in 2024, compared with 20.5 percent in 2023. • Profit per share for 2024 was $22.05, and excluding the items in the table below, adjusted profit per share was $21.90.
Profit per share for 2023 was $20.12, and excluding the items in the table below, adjusted profit per share was $21.21. • In order for our results to be more meaningful to our readers, we have separately quantified the impact of several significant items.
A detailed reconciliation of GAAP to non-GAAP financial measures is included on pages 47 - 48.
Full Year 2024 Full Year 2023 (Dollars in millions except per share data) Profit Before Taxes Profit Per Share Profit Before Taxes Profit Per Share Profit $ 13,373 $ 22.05 $ 13,050 $ 20.12 Restructuring (income) costs - divestitures of certain non-U.S. entities 164 0.22 — — Other restructuring (income) costs 195 0.32 194 0.30 Pension/OPEB mark-to-market (gains) losses (154) (0.23) (97) (0.14) Tax law change related to currency translation — (0.46) — — Restructuring costs - Longwall divestiture — — 586 1.14 Deferred tax valuation allowance adjustments — — — (0.21) Adjusted profit $ 13,578 $ 21.90 $ 13,733 $ 21.21 • Enterprise operating cash flow was $12.0 billion in 2024.
Caterpillar ended 2024 with $6.9 billion of enterprise cash.
OVERVIEW Total sales and revenues for 2024 were $64.809 billion, a decrease of $2.251 billion, or 3 percent, compared with $67.060 billion for 2023.
The decrease reflected lower sales volume , partially offset by favorable price realization .
Lower sales volume was primarily driven by lower sales of equipment to end users.
Profit per share was $22.05 in 2024, compared with profit per share of $20.12 in 2023.
Profit was $10.792 billion in 2024, compared with $10.335 billion in 2023.
The profit impact of lower sales volume was more than offset by favorable price realization and the absence of the impact of the divestiture of the company's Longwall business in 2023.
Trends and Economic Conditions Outlook for Key End Markets Our results continue to reflect the benefit of the diversity of our end markets.
In Construction Industries, we expect moderately lower sales of equipment to end users in North America in 2025 compared to 2024.
Construction spend in North America remains healthy, primarily driven by large, multi-year projects and government-related infrastructure investments supported by funding from the Infrastructure Investment and Jobs Act (IIJA).
Although we anticipate the combined non-residential and residential construction spend in 2025 to remain similar to 2024 levels, our current planning assumptions reflect lower demand for new equipment in 2025 as compared to 2024.
We also expect lower dealer rental fleet loading in 2025 compared to 2024, although dealer rental revenue is expected to grow.
We remain positive about the medium- and long-term outlook in North America.
In Asia Pacific, outside of China, we expect soft economic conditions to continue into 2025.
We anticipate China to remain at relatively low levels for the excavator industry above 10-tons.
In EAME , we anticipate that weak economic conditions in Europe will continue, and we anticipate a healthy level of construction activity in Africa and in the Middle East in 2025.
Construction activity in Latin America is expected to moderately decline in 2025 as compared to 2024.
We also anticipate the ongoing benefit of our services initiatives will positively impact Construction Industries in 2025.
In Resource Industries, we anticipate lower sales of equipment to end users in 2025 compared to 2024, partially offset by higher services revenues, including robust rebuild activity.
Customers continue to display capital discipline, although key commodities remain above investment thresholds.
Customer product utilization remains high, the number of parked trucks remains relatively low, the age of the fleet remains elevated, and our autonomous solutions continue to see strong customer acceptance.
We continue to believe the energy transition will support increased commodity demand over time, expanding our total addressable market and providing further opportunities for long-term profitable growth.
In Energy & Transportation, demand is expected to remain strong in Power Generation, as we expect growth for both reciprocating engines and turbines and turbine-related services in 2025 as compared to 2024.
Overall strength in Power Generation, for both prime and backup power applications, continues to be driven by increasing energy demands to support data center growth related to cloud computing and generative artificial intelligence (AI).
Through continued focus on improving manufacturing efficiencies, along with initial stages of our investment to increase large engine output capability, we expect growth in reciprocating engines for Power Generation in 2025.
We also expect growth in turbines and turbine-related services for Power Generation, driven by increased customer demand.
For Oil and Gas, we expect moderate growth in 2025 as compared to 2024.
We expect reciprocating engines and services to be slightly down in 2025 due to continuing capital discipline by our customers, industry consolidation and efficiency improvements in our customers’ operations.
We expect growth for turbines and turbine-related services in Oil & Gas in 2025 as compared to 2024.
For turbines and turbine-related services used in Oil & Gas applications, backlog remains strong, and we see continued healthy order and inquiry activity.
Demand for products in Industrial applications in 2025 is expected to remain at a relatively low level, similar to 2024.
In Transportation, we anticipate growth in 2025, driven by rail services.
Full-Year 2025 Company Trends and Expectations For the full-year 2025, we anticipate sales and revenues will be slightly lower compared to 2024, primarily driven by lower sales volume and unfavorable price realization.
We expect lower sales in Construction Industries and Resource Industries to be partially offset by higher sales in Energy & Transportation.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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